A recent survey in Uganda indicates that business performance in the region showed improvements.
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The survey which was conducted by Stanbic Bank, and produced by S&P Global, measured the economic performance of Uganda via data collation from business executives and procurement managers.
The survey covers the duration of a month, this case being December and the data which is collated is done so under a number of parameters.
For the month of December, the survey showed that the Purchasing Managers’ Index (PMI) rose by 2 points, when compared to the previous month. In November, Uganda’s PMI stood at 50.9, while in December, the country’s PMI rose to 52.
This survey has existed from 2016, and has since then surveyed numerous businesses in the private sectors. For December last year, the survey covered 400 private companies in the agriculture, industry, construction, wholesale and retail and service sectors.
The rise in PMI is due to the country’s growing demand for goods and services, which has been on a steady increase for the last 5 months.
According to the economist for Stanbic Bank, Ms Mulalo Madula, although businesses were not without some complications, business conditions in the country generally improved.
“Price pressures remain high, largely due to the continued pass-through of electricity, fuel, and raw materials costs,” She said.
“We may see some positive signs, such as easing supply chain tensions making us less anxious than we were a few months ago when concerns about energy prices peaked,” she added.
This increase in PMI shows the prospect for foreign investors to establish businesses in the East African country. Business managers within the country are confident that the business conditions in Uganda will encourage firms to increase planned investments and contribute to spending on newly produced goods and services.
Regardless, weaker external demand and lagged slowdown in domestic demand owing to monetary tightening pose downside risks.
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